Friday, June 20, 2014

Not a bubble?

in CHE: The Miseducation of America
The movie 'Ivory Tower' and the rhetoric of crisis and collapse

Still, for all its admirable instincts, Ivory Tower ends up reproducing some of the errors, and more importantly, many of the limitations of the higher-education debate. We can start with student debt, as everybody does. The movie hits the usual points. It reminds us that the total of outstanding student loans exceeds $1-trillion, tells us that the average debt is $25,000 at graduation, and touches on the story of a young person who has borrowed an enormous sum ($140,000) and faces a daunting labor market while living on food stamps. But it also makes the usual omissions. It doesn’t tell us that the rise in aggregate debt is mainly the result, not of individuals borrowing more for college, but of more individuals going. From 2000 to 2012, per-student borrowing increased by about 30 percent—deplorable, but not catastrophic. It doesn’t tell us that "average debt" refers to all borrowers, not all students. Forty-three percent of those who graduate from public universities, which accounts for about 70 percent of the college population, don’t take out any loans at all (a figure that changed very little over those 12 years). In 2012, average debt per graduate was a little over $14,000. (The numbers are somewhat worse at private institutions: about $30,000 per borrower and $20,000 per graduate.) As for those who owe $100,000 or more, they represent a tiny minority of students, on the order of 2 percent. Meanwhile, 43 percent of borrowers (and therefore more than 65 percent of students) owe $10,000 or less.

This is not to say that student debt is not a big, serious, and growing problem, or that tuitions are not far too high. Behind that trillion dollars in student debt lies another, no doubt even larger number: the sum that families are paying (and in some cases, borrowing) so their kids don’t have to take out quite so many loans. Behind the figures on average debt at graduation is an even more distressing story: debt at, let us call it, nongraduation, the moment when so many young people decide to give up on college altogether (only 56 percent of students at public universities graduate within six years)—undoubtedly, in many cases, because they don’t want to take on more debt. Then there are the many students who are deterred by costs from starting college at all.

Lots to think about in that piece...and maybe, for some, at this event tonight?

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